MANILA, Philippines – Pilipinas Shell Petroleum Corp. reported a net income of P5.07 billion in the first half of the year, up 28 percent from the same period in 2015.
However, sales fell to P71.7 billion from P88.37 billion largely due to lower product prices, documents submitted to the Securities and Exchange Commission showed.
Last year, Shell posted a net income of P3.6 billion, a marked turnaround from two consecutive years of losses (P8.5 billion in 2014 and P912 million in 2013) due to improvement in refining margins and lower inventory losses. Sales also declined to P168.8 billion.
Aside from improving finances, Shell said its gearing ratio – a measure of a company’s financial leverage – has also improved to 32 percent as of the end of the first quarter.
“With a recently completed rights issue in 2015, the company believes it has low gearing and a well capitalized balance sheet that positions it for growth opportunities,” Shell said.
Last year, Shell raised P17.9 billion from a rights offering, effectively boosting its capital, which is necessary for its planned initial public offering.
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After almost 18 years, Shell is pursuing its long-delayed IPO, seeking to raise about
P29.7 billion from the sale of of 330 million shares.
The offering includes an over allotment of up to 30 million shares, which will be sold for a maximum P90 per share.
Industry sources said Shell is hoping to do the IPO before its country chairman Edgar Chua retires next month.
Proceeds from the IPO will be used to expand the company’s existing retail network and for the general maintenance and upgrade of its refinery in Batangas.
Shell has tapped JP Morgan and BPI Capital as lead underwriters. Rothschild serves as the financial advisor.
Shell had the second largest market share in the country in terms of fuel sold at 29 percent as of the end of 2015.
As of end-June, the company had a widespread network of 966 retail service stations, of which 583 are in Luzon, 160 in the Visayas and 223 in Mindanao.